Why MSP hike may reap rich dividends in election states

Madhya Pradesh and Rajasthan, where the BJP is in a close fight with the Congress, are among key wheat producers in the country.

Wheat Production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

Apart from wheat, MSP has been increased for the 2024-25 rabi marketing season for gram (by Rs 105), barley (Rs 115), lentil (masur, by Rs 425), rapeseed-mustard seed (Rs 200) and safflower (Rs 150).

Incidentally, farmers have been angry with the Centre over a ban on wheat exports since May 2022, done to control prices of wheat and wheat flour.

The government Wednesday dismissed apprehensions of the MSP rise creating a pressure on prices, and said the hike was in line with the Union Budget 2018-19 announcement of fixing the MSP at a level that is at least 1.5 times of the all-India weighted average cost of production.

Gram Production Estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

Apart from the Assembly elections, the five election-bound states are crucial to the Lok Sabha polls next year, accounting for 83 MPs in all.

Poll-wise significance

* Madhya Pradesh: The state, which saw the Congress win narrowly in 2018 and lose power in less than two years owing to defections to the BJP, is the top producer of masur in the country, the second largest producer of gram, wheat and rapeseed-mustard, and the fourth largest producer of barley.

Farmer distress is one of the top poll issues in the state, where 70% of the population is linked to the agriculture sector. Farmers have been facing problems like low crop prices, high input costs, erratic weather, crop damage, debt and lack of infrastructure support.

Lentil Production Estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

In its manifesto for the state polls released on Tuesday, the Congress promised waiver of loans and electricity bills for farmers, support price of Rs 2,600 for wheat, Rs 2,500 for paddy, and purchase of cow dung at Rs 2 per kg.

The BJP is counting on the lure of schemes like the Mukhyamantri Kisan Kalyan Yojana, PM-Kisan and the Pradhan Mantri Awas Yojana (for housing).

* Rajasthan: A state held by the Congress, which has been fighting off the BJP challenge all through its term of five years, Rajasthan is the largest producer of barley and rapeseed-mustard, the third largest producer of gram, and the fifth largest producer of wheat and lentil.

Safflower production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

During a recent poll rally in Rajasthan, Prime Minister Narendra Modi had raised the Congress promise of farmer loan waiver and asked if people had received it. He had also accused the Ashok Gehlot government of leaving “no stone unturned” to stop the Narmada water organised by the Centre from reaching Rajasthan’s farmers.

The Congress is betting big on the Eastern Rajasthan Canal Project, which is expected to ensure water for drinking and irrigation in 13 districts of the state, and alleging that it is stalled due to the Modi government.

Last year, the Gehlot government, in a first, had presented a separate agriculture budget.

* Telangana: The state, where the Bharat Rashtra Samithi (BRS) is in power and where the BJP is trying to make inroads, is the third largest producer of safflower in the country.

The BRS government has a winning farmer scheme in Rythu Bandhu, and in its manifesto released recently, the party promised to raise farm investment support under it to Rs 12,000 per acre per farmer, from Rs 10,000 right now.

Rapeseed and Mustard production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

Last year, the BRS – till then seen as “friendly” to the Centre – had launched protests against the Modi government demanding that it procure paddy after a bumper crop in the state.

The Congress, the primary opposition party in the state, has promised to increase farmer support to Rs 12,000, and said it would also pay crop investment support to tenant farmers.

* Chhattisgarh, Mizoram: These two states do not account for much of the rabi crops which saw an MSP hike on Wednesday.

The Bhupesh Baghel government in Chhattisgarh, though, has been banking big on farmers, with the ruling Congress in a tussle with the Centre over credit for the state’s high procurement price for paddy (the highest in the country). It remains one of the main poll issues in the state.

Why wheat

It is the second largest crop (after paddy) in terms of area coverage in the country. In crop year 2022-23, the area under wheat stood at 318.25 lakh hectares, and its production 110 million tonnes (MT).

In the 2023-24 rabi marketing season, the Centre has procured 26.2 MT of wheat for the central pool, benefiting 21.28 lakh farmers. Of these 21.28 lakh farmers, 7.96 lakh are from MP, or 37.4% of the total.

The new MSP will be effective next summer season, around the same time as the Lok Sabha elections.

The new MSP over the 2023-24 rabi marketing season is the highest hike for wheat in the last 15 years in absolute terms. At 7%, it is also the highest in the last 12 years in percentage terms.

Barley production estimate. Source: Unified Portal for Agricultural Statistics (UPAg) and Ministry of Agriculure & Farmers’ Welfare

Top producers, 2022-23

📌 Wheat, MSP hike 7%

UP: 336.10 lakh tonnes or LT

MP: 227.3 LT

Punjab: 167.83 LT

Haryana: 109.36 LT

Rajasthan: 106.36 LT

📌 Barley, MSP hike 6.63%

Rajasthan: 11.26 LT

UP: 5.92 LT

Haryana: 0.46 LT

MP: 0.39 LT

Uttarakhand: 0.28 LT

* Gram, MSP hike 1.9%

Maharashtra: 31.75 LT

MP: 30.95 LT

Rajasthan: 18.09 LT

Gujarat: 12.98 LT

UP: 8.98 LT

📌 Rapeseed-mustard, MSP hike: 3.67%

Rajasthan: 58.32 LT

UP: 16.20 LT

MP: 15.51 LT

Haryana: 13.02 LT

West Bengal: 8.16 LT

📌Lentil (masur), MSP hike 7.08%

MP: 6.36 LT

UP: 5.17 LT

West Bengal: 1.51 LT

Bihar: 1.32 LT

Jharkhand: 0.48 LT

📌Safflower, MSP hike 2.65%

Karnataka: 0.56 LT

Maharashtra: 0.23 LT

Telangana: 0.08 LT

Andhra Pradesh: 0.03 LT